US CFTC Accuses Cryptocurrency Operators of Fraud
One of the greatest fears linked to the cryptocurrency market is that digital currencies are going to be used for illegal or criminal activities, such as fraud, money laundering or terrorism financing. Now, this fear has somehow been turned into reality, as the US Commodity Futures Trading Commission (US CFTC) has officially filed charges against three companies for cryptocurrency fraud.
The companies are accused of fraud involving cryptocurrencies
According to the US CFTC, the three companies have engaged in fraud and misappropriation of cryptocurrencies bitcoin and litecoin. The US CFTC officially filed charges against the three in a New York District Court.
The three companies are serving as cryptocurrency operators. Among the charges brought by the authorities are defrauding customers and violating the regulations that govern commodity trades.
One of the companies which has been targeted by authorities is Entrepreneurs Headquarters Ltd. The company is registered in the UK and authorities claim that it asked no less than $1.1 million worth of bitcoin from a total of 600 people. Allegedly, the practice started in April 2017. The company promised users that it will convert the digital currency into fiat currency, and then invest them in a pooled investment vehicle.
Of course, the company promised users that they will obtain high returns. But, according to US authorities, this is not what happened. Authorities claimed that not only that the company did not trade on behalf of its customers, but actually misappropriated no less than $1 million.
A second company targeted by authorities is Cabbage Tech Corp. In this case, the company is accused of wrongdoing linked to buying and trading bitcoin and litecoin. The company allegedly engaged in wrongdoing between January 2017 and the present time. The company was allegedly not registered with the US CFTC. No details were revealed about the third case, according to Reuters.